Litecoin creator Charlie Lee and the Litecoin Foundation have each apologized for failing to conduct due diligence on LTC-based payment processing startup LitePay, which has sparked allegations of conducting an exit scam due to its abrupt closure.

As CCN reported, the Litecoin price had surged in mid-February on news that LitePay — which purported to offer both merchant services and an LTC-funded debit card — would launch later in the month.

However, that launch never came, and in a statement dated March 26, the Litecoin Foundation revealed that LitePay CEO Kenneth Asare had informed them that he had ceased all operations and intended to sell the company, an announcement that came less than two weeks after Asare held a much-lampooned Reddit AMA in which he gave few specifics about the project and was accused of evading questions.

From the Litecoin Foundation’s statement:

“Prior to [being told that LitePay was ceasing operations], the foundation had approached Kenneth regarding his less than transparent nature with the company and to express our, and the community’s, concerns regarding his recent Reddit AMA. It was at this time that Kenneth asked the foundation for more funds to continue operations. The foundation refused any further funding as he was unable to provide a satisfactory picture of where the money had been spent and refused to go into exact details about the company and show objective evidence to back up his statements.”

“We are greatly disheartened that this saga has ended in this way and we apologize for not doing enough due diligence that could have uncovered some of these issues earlier,” the statement continued. “We are currently working hard to tighten our due diligence practices and ensure that this does not happen again.”

Writing on Twitter, Litecoin creator Charlie Lee issued similar comments, and he apologized for adding to the hype around LitePay when it was first announced in February.

Like everyone else, we got too excited about something that was too good to be true and we optimistically overlooked many of the warning signs. I am sorry for having hyped up this company and vow to do better due diligence in the future. https://t.co/khIjeHnyZ1

Nevertheless, the foundation stressed that Litecoin was doing “perfectly fine” without LitePay and that it will continue to do so now that the company’s claims have been proven false.

“The ecosystem is far bigger than one company and is continually growing with support from many others with market-ready products joining the space and fulfilling their promises to make it easier for the world to use Litecoin,” the foundation concluded.